April 15, 2013

MEDIA ADVISORY: IER's Michaels to Testify on Wind Welfare

April 15, 2013

“I have analyzed every existing argument that attempts to link support for renewables to green jobs. In every case I have found the arguments sadly lacking, both in logic and in any measured effects.” – Dr. Robert Michaels

“The physical properties of electricity greatly complicate the operation of an electrical system whose resources include substantial amounts of generation capacity that produces only intermittently. Maintaining area-wide reliability requires at all times that the amount of power being produced equal the amount users wish to consume. Mismatches of less than one second will produce region-wide blackouts, whether production exceeds consumption (which overloads lines) or the reverse (which destabilizes power flows). Storing large amounts of power is prohibitively costly (except behind hydroelectric dams) and researchers have yet to produce economical batteries or other storage devices on the necessary scale.” (p.4)

“Today, there is growing agreement that America’s energy future has definitively changed for the better with the development of technologies for extracting natural gas and liquids from hitherto-inaccessible shales and tight sands. These technologies are cost-competitive with existing ones and environmentally acceptable. Renewables policies were based in large part on an expectation that the end of inexpensive gas and oil was near. Instead of exhaustion, the nation now looks forward confidently to centuries of clean, inexpensive and secure energy. Instead of a “bridge fuel” to a renewable future, shale-based hydrocarbons are now the future. When the end of natural gas appeared in sight, renewable power subsidies could have had a role to play in facilitating adjustment to it. It is now time to write them out of the drama.” (p.10)

“Wind power’s costs must eventually turn up in consumers’ monthly bills, or if not, then certainly in their future tax burden. A tax that consumers must pay to buy something of low value inflicts harm on their budgets and produces benefits for those interests that succeeded in getting it enacted. Additional federal support for otherwise uneconomic technologies cannot possibly produce “green jobs” and prosperity. How could it possibly happen if that support raises energy prices for everyone? Quite simply, taxing Person A and spending the money to employ a new green job holder must at the same time destroy a job held by Person B who would have otherwise received the taxed-away income.16 It does not matter whether the tax takes the form of a higher power price or a collection by the IRS.” (p.11)

“Since the early twentieth century economists have theorized about the possible value of governmental research funding and attempted to measure its actual consequences. We are all familiar with claims that governmental support was essential for the rise of digital technology and the Internet, but numerical evidence that might verify these conclusions is largely missing. For every claim about its importance (or unimportance) counter-examples seem easy to find. Was governmental support necessary to bring about the Internet? Was the development of hydraulic fracturing achieved with little or no governmental research funding?” (p.13)

“Wind cannot be supported on grounds that it produces “green jobs.” There is no evidence that it does so and no theoretical support in economics for claims regarding green jobs. Existing methods of estimating green jobs are in fact one-sided contrivances whose only possible prediction is that building renewables must increase employment. The conclusion is not based on observations, but is built into the mathematics that underlies the prediction.” (p.16)